RTTNews - Stocks are showing a lack of direction in afternoon trading on Tuesday, reflecting another low volume outing. The major averages have been unable to sustain any significant moves amid another light day on the economic front.
In an interview with RTT News, Chuck Lieberman, chief investment officer for Advisors Capital Management discussed the recent sluggish trading, saying, I think investors are now beginning to hold back a little bit to see if the green shoots in the economy.turn into flowers.
Further, Lieberman said, There's a lot of upside left, but to realize some of that upside I think we have to slowly but surely gain more confidence that the economy continues to recover.
Some traders may be looking ahead to the Treasury Department's auction of $35.0 billion worth of three-year notes set to take place this afternoon.
The bond market has been in focus recently, as the Fed's quantitative easing moves have done little to slow rising yields, causing some concern among investors. The results of the auction are due to be announced at 1:00 p.m. ET.
The major averages have moved to the upside in recent trading, with the S&P 500 rejoining the Nasdaq in positive territory. While the Dow remains down 1.89 at 8,762.60, the Nasdaq is up 15.71 at 1,858.11 and the S&P 500 is up 2.83 at 941.97.
The major sectors are turning in a roughly mixed performance, contributing to the lackluster moves being shown by the major averages in afternoon trading.
Defense stocks are showing a notable retreat on the day, however, with the Amex Defense Index slipping by 1.3 percent on the day. With the pullback, the index is moving further off of the six-month high set last Friday.
On the other hand, semiconductor and trucking stocks are posting notable gains on the day. Subsequently, the Philadelphia Semiconductor Index and the Dow Jones Trucking Index are up by 4 percent and 2.3 percent, respectively.
The semiconductor sector has been boosted by a 6.4 percent gain by shares of Texas Instruments (TXN), which bolstered its second quarter guidance.
Notable strength is also visible among steel and oil service stocks. The oil service sector is being led higher by Weatherford International (WFT), which has risen by 4.5 percent on the day.
Stocks In The News
Pep Boys (PBY) is on the rise after the firm reported first-quarter net income of $10.9 million or $0.21 per share, compared to $4.7 million or $0.09 per share in same quarter last year. Wall Street analysts expected the company to earn $0.07 per share for the quarter.
Traders reacted positively to the news, driving the stock up by 10 percent, helping it reach its best intraday level in over nine months earlier in the session.
Shares of BlackRock (BLK) are also climbing while the firm is bidding for Barclays' (BCS) Global Investors division. BlackRock is up by 7.5 percent in afternoon trading, rising to its best intraday price level in over seven months earlier in the day.
Meanwhile, Quicksilver (ZQK) is moving to the downside following slightly worse than expected second quarter results. The company reported second quarter earnings of $0.02 per share compared to analyst estimates of $0.04 per share.
The stock is lower as traders react negatively to the news, falling by 20.5 percent and backing off of a seven-month high set in the previous session.
In Focus: TARP Payback, Geithner Testimony, Corporate and Economic News
The U.S. Department of Treasury announced Tuesday that 10 of the largest U.S. financial institutions borrowing money from the Treasury are planning on paying back their loans. Organizations such as JP Morgan Chase (JPM), U.S. Bancorp (USB) and Bank of New York Mellon (BK) will repay a total of $68 billion.
Speaking to U.S. lawmakers, Treasury Secretary Timothy Geithner said that he plans to begin the reform of the U.S. regulatory system soon. In the next few weeks we will outline a comprehensive plan of reform that will include systemic risk regulations to ensure that no large and interconnected firm or market can take on so much risk that its failure could destabilize the entire financial system, Geithner told a subcommittee of the Senate Appropriations committee.
On the economic front, wholesale inventories fell by a little more than expected in the month of April, according to a report released by the Commerce Department on Tuesday, with the report also showed a modest decrease in wholesale sales.
The report showed that wholesale inventories fell 1.4 percent in April following a revised 1.8 percent decrease in March. Economists had expected inventories to decrease by about 1.1 percent compared to the 1.6 percent drop originally reported for the previous month.
Additionally, the Commerce Department said that wholesale sales edged down 0.4 percent in April after falling by a more significant 2.4 percent in March. Wholesale sales were down 19.5 percent compared to the same month a year ago.
In corporate news, bankrupt automaker Chrysler's planned asset sale to a group led by Italian automaker Fiat was thrown into uncertainty after a U.S. Supreme Court Justice issued a stay on the sale. The stay was sought by a group of Indiana pension funds.
Men's Wearhouse (MW) reported net earnings of $5.3 million or $0.10 per share for the first quarter, compared to $9.9 million or $0.19 per share in the prior year quarter. Wall Street analysts expected the company to report a loss of $0.01 per share for the quarter.
Meanwhile, the Wall Street Journal reported that consumer goods giant Procter & Gamble (PG) is expected to name its Chief Operating Officer Robert McDonald as the new Chief Executive Officer, effective July 1, 2009.
In overseas trading, stock markets across the Asia-Pacific region finished Tuesday's session moderately lower. Japan's benchmark Nikkei 225 Index fell by 0.8 percent, while Hong Kong's Hang Seng closed down by 1.1 percent.
Meanwhile, the major European markets closed mixed for the session. The U.K.'s FTSE 100 Index drifted lower by less than a tenth of a percent and the German DAX Index fell by 0.1 percent, whereas the French CAC 40 Index finished up by 0.2 percent.
In the bond markets, treasuries are continuing to tread steadily in positive territory. Subsequently, the yield on the benchmark ten-year note is down to 3.85 percent, a drop of 3.9 basis points.
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